[QUOTE=B767]"Overcharging", strong language wouldn't you agree? On what basis do you make this statement? Are you saying that because one company might have lower operating costs that the company with higher cost is automatically "overcharging" it's customers? If that is the case than AC must have been overcharging it's customers on routes where it competes against WJ & SG? Maybe, just maybe Cara had to charge another $ 14M to make up for the money AC screwed them out of when they went into CCAA? [QUOTE]


Okay, overcharging is a little bit agressive.

Cara's liability from the CCAA process is only equal to 6 weeks revenue from the old AC contract. Considering most of their money comes from Second Cup, Harvey's, Swiss Chalet, Milestones, etc, I suspect they can take the hit.

What this does smack of is Cara using the AC situation to wring out cost savings from the enployee group. Asking for salary reductions has traditionally been the way to get cost savings from labour productivity improvements and the blame game has all ready inprogress.

What Cara needs to od is focus on improving labour productivity rather than salary cuts,however unions are always very reluctant to talk unless suficiently scared.

Oh, and I have been on the receiving end of a corporate customer saying my company was overcharging them because our fees and processes were less efficient than a competitors. My organization told this competitor we charged industry average rates (actually a little below average) and were still losing buckets of money (industry downturn). We did not accept their position but continued to discuss the situation. Three months later the "lower cost" competitor went out of business. After this incident, I tend to use the term overcharging a little too lightly sometimes.